The filed for Chapter 11 bankruptcy and will permanently shutter 185 locations that had been temporarily closed because of the pandemic.has taken down another major restaurant chain. Ruby Tuesday said Wednesday that it has
Ruby Tuesday will continue to operate its remaining 236 locations while it restructures its debt, the company said. The privately held chain, based in Maryville, Tennessee, has struggled in recent years in part because many of its locations are inside shopping malls and foot traffic has declined.
The forced closure of restaurants because of COVID-19 was the final straw, CEO Shawn Lederman said in court documents. “The almost complete elimination of in-store dining, which historically has represented over 90% of the company’s total sales, struck at the heart of the company’s business model,” he said.
Ruby Tuesday has 7,300 employees across eight states and five foreign countries. Seven thousand of those employees have been furloughed during the pandemic, and many have not returned to work, the bankruptcy filing states. That’s despite the chain’s securing a $10 million Paycheck Protection Program loan.
Declaring bankruptcy is a “critical step” for the restaurant’s long-term financial health and will lead “to a stronger Ruby Tuesday,” Lederman said in a statement.
Restaurant chains, and for bankruptcy protection this year, all citing pandemic woes.
Customer visits to full-service restaurants in the U.S. plummeted 47% between April and June, according to NPD Group, a consulting firm. Visits have ticked upward since then, but were still down 25% in August.
The Associated Press contributed to this report.